Did you try "mount d d:\ -t cdrom -usecd 0 -ioctl" and run the install from inside dosbox?

Yeah, I sure did. I can see the DOSBox window (I run everything in a window) go from showing my settings to the standard default settings to closing. ( I have it set to autoclose on exit).

You could try making an image of the game with ultraiso, poweriso or cdrwin in bin/cue and then mount in dosbox, you have to put the two files "the ones with bin and cue extension" in the mounted dosbox directory, so if you mount c c:\something you have to put the files in there and then in the dosbox you have to "imgmount d c:\filewithextension.cue -t iso" and start from there to install the game and see if it works.

I have run it in DOSBox 0.70 with both the CD and a CD image I made. I used 'mount d d:\ -t cdrom' in both instances and it worked fine. Have you tried running the game in Windows? It will run, but the CD drive letter the disc is in has to be the 1st non-hard drive drive letter available (C is HD, D is CD, or C is HD, D is HD, E is CD...) If it runs in Windows, at least we'll know it's a DOSBox issue.

I do assume that you are running DOSBox in Windows. If not, than there might be more to the issue.